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FOR IMMEDIATE RELEASE: April 21, 2004

SCHUMER URGES CLAMPDOWN ON FOREIGN MILK SUBSTITUTE IMPORTS (MPC's) THAT COST
NEW YORK DAIRY FARMERS MILLIONS

"MPC" milk substitutes from New Zealand, Australia, Canada and Europe are used in coffee creamers & snack foods and hurt NY dairy farmers; Processors have sought to use MPC's in all US cheese – instead of using domestic dry milk produced in NY

Schumer: Last year, MPC's cost NY dairy farmers over $96 million; Capital Region $9.79 million; Central NY $12.01 m; Hudson Valley $3.47 m; North Country $21.15 m; Rochester/Finger Lakes $15.01 m; Southern Tier $13.59 m; Western NY $21.43 m

Schumer 1-2 punch would slap a tariff on foreign MPC's legislatively and protect NY dairy producers by excluding MPC's from most cheeses

With New York dairy farmers continuing to endure tough times, US Senator Charles E. Schumer today warned that increased foreign imports of Milk Protein Concentrates (MPCs) from New Zealand, Australia, Canada and Europe that are used instead of dry milk cost New York farmers more than $96 million last year. Schumer, who has been dubbed "The Brooklyn Farmer," detailed his plan to slap a tariff on many foreign MPC imports – and urged the US Food and Drug Administration (FDA) not to allow the use of MPC's in cheeses, yogurts and other dairy products.

"For too long our farmers have been getting hammered on all sides," Schumer said. "If it isn't weather problems, it's the USDA failing to enforce the support price on milk. If it isn't problems with harvests, it's free trade agreements that open up our markets to a flood of competition. Now, it's these highly subsidized MPCs that companies are using instead of New York milk in dairy products like coffee creamers and snack foods. These MPC's are foreign producers' unfair way of getting around tariffs and it's got to stop now."

Currently, foreign dairy producers are avoiding US tariffs on nonfat dry milk by instead selling MPCs to be used in products such as cheese spreads, snack foods and coffee creamers. While there is a 39 cent tariff on nonfat dry milk, there is just a 0.17 cent per pound tariff on MPCs. By mixing small amounts of milk protein with nonfat dry milk, foreign producers in countries including New Zealand, Australia, Canada and some European countries essentially import nonfat dry milk as MPCs and avoid the tariff. As a result, over the last decade, MPC imports have more than doubled -- undermining the market for non-fat dry milk, reducing the farm price for milk, and costing New York dairy farmers millions every year. As MPC's have replaced nonfat dry milk in the market, they have driven the price down of milk for New York's farmers and resulted in significant losses in revenue.

Schumer today released a new analysis of the impact of foreign imports on New York’s dairy farmers that shows that MPC imports cost the state's farmers an estimated $96 million in 2003, specifically:

• Cheap MPC imports cost dairy farmers in the Capital Region an estimated $9.79 million last year;
• Cheap MPC imports cost dairy farmers in Central New York an estimated $12.01 million last year;
• Cheap MPC imports cost dairy farmers in the Hudson Valley an estimated $3.47 million last year;
• Cheap MPC imports cost dairy farmers in the North Country an estimated $21.15 million last year;
• Cheap MPC imports cost dairy farmers in Rochester/Finger Lakes an estimated $15.01 million last year;
• Cheap MPC imports cost dairy farmers in the Southern Tier an estimated $13.59 million last year;
• Cheap MPC imports cost dairy farmers in Western New York an estimated $21.43 million last year.

[For county-by-county breakdowns and an explanation of the study please see attached report.]

To protect New York dairy farmers, Schumer today urged Congress to close the MPC loophole by passing a measure he is co-sponsoring (s.560) that would apply a tariff of 71 to 98 cents per pound of MPC depending on the protein concentration. In addition, to prevent domestic cheese processors from using MPCs as ingredients in certain cheese, yogurt and ice cream products, Schumer is supporting a measure sponsored by Senators Russ Feingold and Jim Jeffords that would block MPCs from being added to the ingredient list for domestic natural cheeses. Last week, Schumer joined 19 other Senators to urge the FDA to continue to prohibit the use of MPC's in domestic natural cheeses.

Schumer warned that allowing the use of MPCs in other products would further damage the market for New York dairy farmers. “Demand for domestic milk would weaken, which would depress milk prices that are just beginning to recover from their lowest levels in two decades," Schumer and the other senators wrote in their letter last week to Lester Crawford, Acting Administrator of the U.S. Food and Drug Administration. "The resulting oversupply of domestic milk could increase costs to the dairy price support program, forcing American taxpayers to pay more due to additional program costs.”

Last week Schumer visited St. Lawrence County to discuss the growing concern over MPC imports with local officials. Schumer said that he supports a bill in the New York State Assembly sponsored by Assemblyman Darrel Aubertine that would also keep MPCs out of US cheese.

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